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John Moffat.
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iza1
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Hi,
I suddenly got confused with something.
If production is 3500 and sales are 3300
If we are using absorption costing profit
Sales -CoSt ( 3500* per unit costs)
But in marginal I see, cost is found by multiplying (3300*per unit cost)Why is that?
John Moffat
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The cost of goods sold in both cases is the cost of the 3,300 units sold.
(Your confusion might be because to arrive at the cost of goods sold we take the cost of production and adjust for the opening and closing inventories)
I might help you to watch the free Paper MA lectures on absorption and marginal costing, because this is a Paper MA topic.
(Because it is Paper MA, then although it theory it can be asked again in Paper PM, the chances of it being asked in Paper PM are minimal)
iza1
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